If you want to make an investment in share market or in mutual fund there are various things that you should know. So from these, Today I am going to discuss NAV. It is very important for you to understand what is NAV. if you want to invest in a mutual fund. Those who do not want to directly invest in the stock market or they do not know the stock market, they can invest in the mutual fund. By investing in the mutual fund, your investment is in the hands of experts and in this way you can reduce the risk of direct investment in the stock market. Today, we will learn here that what is the NAV in the mutual fund, how it is counted and how important it is.

First of all, what is NAV

Net Asset Value, or NAV, means the value of the total property. Net asset value, or NAV, in any of the mutual fund, after deducting the liabilities from the total value of all the shares of the portfolio, including cash, the outstanding balance is obtained by dividing it by the total number of units remaining.

NAV fund is per unit’s total asset value (excluding expenditure) and at the end of each day’s business, it is calculated by the asset management company (AMC) of that fund. On any given day, if that mutual fund is terminated, then the unitholder of that mutual fund will get the price for each unit as per the rate of that unit of that day. In a way, you can say that NAV is the book value of any mutual fund unit.

Most of the unit’s base value in the mutual fund is Rs 10 or Rs.100. In each business day, the NAV curve of the unit increases according to the market value of the fund’s portfolio.

Importance of NAV

NAV refers to the growth of the unit of a mutual fund. If you invest Rs 12 per unit in a fund at NAV and after one year, if the NAV of that unit goes up to 15 rupees per unit then that fund has 25% growth. It is wrong to believe that the mutual fund with lower NAV will give good returns and mutual fund with more NAV fund will give fewer returns.

From the NAV of any fund, it can be known that how any fund has performed in the past but in future how any fund will perform cannot be decided by the NAV. So it all depends on market condition, It can go up or down.